Fraud is growing fast – $1.03 trillion was lost to scams globally in a single year in 2023 (GASA) — and the human cost, often devastating, is too easily forgotten behind the numbers. The strongest defence lies in collaboration, data sharing and innovation — fraudsters share information freely, without regard for regulation and quickly adapt to new tools like AI.
- Shared responsibility: Protecting customers and safeguarding the financial system requires joint action.
- Information as defence: Data sharing is our most potent weapon, yet silos, privacy rules, and disclosure barriers limit effectiveness. Norway’s regulatory sandbox explores what data can be shared and how.
- Collaboration works: Banks, regulators, and law enforcement together can shift the balance.
- Social engineering, not identity fraud, is the real threat: Authentication is largely safe – identity fraud is relatively low while romance and investment scams cause the biggest losses. Digital IDs and verifiable credentials can still strengthen safeguards, especially when identification goes two ways.
- AI is a double-edged sword: Criminals use it to deceive, but it also equips defenders with stronger detection and prevention tools.
- Regulation matters: Should social media be regulated, as fraud often begins there? Telecom regulators are acting on nuisance messaging, but more is needed. PSD3/PSR will reshape liability, negligence rules, and impersonation fraud protections.
- Instant payments ≠ instant fraud: Fraud exploits human behaviour, not system flaws. Real-time monitoring and customer awareness are key to keeping instant payments safe.
- Open banking reduces risks: With no card details to steal and SCA on every payment, misdirection and malicious payees become harder.
- The human cost: Fraud can destroys lives. Banks need to combine protection with empathy, recognising the human element of social engineering.
- Proactive prevention: Banks must move from reactive to proactive measures, with trust at the core.
- Education is essential: Awareness and a “stop, think, check” mindset are as critical as technology in staying ahead.
